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By Chinwendu Obienyi
Access Pensions Limited has projected that the performance of the Nigerian economy at the end of 2023 is likely going to be a game of two halves.
According to a statement from the company, the focus on figuring out the identity of Nigeria’s next political leadership team and their policy direction over the next four years will be at the front burner.
Access Pensions is majorly owned by Access Corporation, a leading full service financial corporation with verticals cutting across banking, payments, insurance brokerage, pensions, and consumer lending.
It said, “We believe that the investment landscape in 2023 will be shaped by: Global central banks pulling the plug on the interest rate tightening cycle over 2023 while oil prices will likely recede from the conflict-supported levels towards an average around $70-80/bbl”.
The outlook statement while stating that Nigeria’s oil production is on track towards 1.5-1.7mbpd, a recovery from the depressed levels (sub 1mbpd) of 2022 as pipeline security improves, said the change in political leadership post the 2023 elections will provide the leeway for inflationary adjustments to petrol prices and the exchange rate.
“In summary, after the bear market gloom of 2022 driven by widespread hikes in interest rates across the world, financial markets will look for signs of the impact of these measures on economic activity. Meanwhile, commodity prices are expected to moderate, with crude markets likely to grapple with excess supply as weak economic growth forecasts for major advanced economies will adversely impact crude consumption. For Nigeria, whichever way the elections pan out, we think focus will quickly shift towards decisions on key economic issues: insecurity, FX policy and petrol subsidies which could bring near term inflation.
Given Nigeria’s weak fiscal position however, our base case scenario is for a partial adjustment to petrol pump prices in 2023 alongside further weakening of the official exchange rate. In response to the elevated inflation levels, we expect monetary policy to remain tight, which alongside large government borrowings, speaks to a higher interest rate environment”, the company said.
